Consommé…..or just plain
soup?
The financial universe is just
beginning its post-Covid transformation with broad stroke initiatives that
offer a panoply of competitive opportunities.
Unconstrained by geography, index, or sector there is a new emphasis on
lessons learned from the crises that incorporate key elements of business,
psychology, and finance that coalesce into consistently superior returns on
equity along with sustainable life affirming principles, irrespective of the
economic cycle.
To that extent, the marketplace of
capital gains (and change) is going global and quite dissimilar from the “me
only” movement of the last decade.
Integrating fundamental research alongside social consciousness helps
identify leadership that can endure despite daily market fluctuations.
The case for this enlightened
sophistication is steadily building. Stakeholder
capitalism means businesses create effective
profitability with the other goal of generating positive social impact for
their community and the world at large.
Indeed, recent anecdotal evidence shows us that the connection between
“doing good” and “doing well” is the engine of regional stability, financial
security, and structural purity. That
vision…that mission…sets a new standard for ethical and responsible decision
making.
Make no mistake, this transformation
did not happen overnight in a vacuum. It
is the culmination of many factors, some already known prior to the pandemic,
whose confluence today is making it more palatable for boardrooms and kitchen
table analysts to consider.
Above all, the widening gap in wealth
and social equity/equality pushed us all to reevaluate any system that doomed the disaffected to fall
further behind. Values based lending and
finance that lifts up all of its community members creates an inexorable bond
between government, family, and spiritual institutions.
The future of our planet has never
been more clearly in the hands of its inhabitants, nor more acutely recognized
as our responsibility.
Bending the arc
These changes are redefining
investing, too. One can no longer exclusively
play the stock picking game. The purpose
of money…which once was “green” (profit/greed) is now also “green” as it
reckons with our ecology, our values, and the role that financial markets can
play in dissuading harm inflicted upon others.
It finally looks as if businesses are starting to integrate “good
governance” as a line item on their balance sheet, bettering society while
building prosperity for their shareholders.
This evolution also requires a change
in the mindset and expectations of investors and the financial community. Sustainability (SRI) prioritizes long term
goals over short term reward. One needs
to find an enlightened comfort zone that intersects performance with mitigating
volatility. Failure to do so increases
risk to the portfolio in the long run.
The degree to which immediacy can be disentangled from altruism will be the next “variant” the public
discusses when it comes to determining the best way forward. We need to demand a standard by which we hold
business accountable for their rhetoric and their action. No doubt, the most relevant new initiatives
will be those which focus upon moral, financial and structural development.
The next wave will be about
monitoring the progress of this complex menu and to demand that impact
initiatives become a priority. Without a set of standards by which to
operate there will always be the chance of backsliding into the past. Best practices is not just a phrase, or an ideal, but rather
a system of accountability, reporting, regulation, and evaluation that
reaffirms a commitment to each other.
Revenue is the lifeblood of any
company and, like sausage, how it gets made isn’t often a pretty picture. The inflation numbers reported last week (up
7% year over year) only tell part of the story about what falls to the bottom
line and the future of our economy.
While others obsess about the immediate impact upon a balance sheet, we
will gladly trade that concern for an optimism about a future with clean water
and air, disease prevention, sustainable energy resources, and a conscientious
business environment.
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